Google’s Billions: A Brief Look

It may seem like a billion dollar company such as Google wouldn’t know what to do with all of its riches, but the reality is somewhat different. The second best technology company on Earth may have raked in $37.9 billion in revenues during 2011, but expenses ran up to an impressive $26.2 billion, leaving a mere $9.7 billion, or about 25 percent of revenues, as a net profit.

One of the biggest reasons that Google has continued to gain popularity since its 1998 inception is that it offers many of its services for free. Indeed, 96 percent of its revenue stream arrived via advertising in spite of the fact that the company’s Android Smartphone platform is the most-used in the world.

Much of the $26.2 billion in expenses is put toward traffic acquisition costs and data center operating expenses, including labor, energy, bandwidth and transaction fees. As Google rises in popularity, so too does the cost of running the company. In 2011, Google paid a $784 million increase in data center expenses.

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